110 lines
6.4 KiB
Org Mode
110 lines
6.4 KiB
Org Mode
* https://forum.effectivealtruism.org/topics/land-use-reform
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The problem
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Laws at the local level in the United States and many other countries impose
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strict limits on how much total floor area can be built on a plot of land. Such
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zoning laws constitute a major obstacle to the construction of dense housing.
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The resulting increase in housing prices reduces economic efficiency by creating
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significant deadweight loss; increases inequality by transferring wealth from
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renters to landowners; and reduces both wages and total economic output by
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preventing workers from relocating where they can be most productive.
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The effects of zoning laws on housing prices can be estimated by comparing the
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sale price of housing to the associated costs of land and construction.[1] Open
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Philanthropy has combined these estimates with rent data and some additional
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assumptions to conclude that the aggregate "tax" on renters in five large
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metropolitan areas amounts to over $100 billion in deadweight loss per year.[2]
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A study by economists Chang-Tai Hsieh and Enrico Moretti examines the costs
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resulting from the reduced flow of workers to more productive regions within the
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United States due to rising housing prices. The authors conclude that land use
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restrictions depress annual U.S. wages by $1.27 trillion and output by $1.95
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trillion.[3][4]
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If land use restrictions create these problems, why do they persist? In part,
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the costs of restricting land use in a given location are incurred by workers
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who would benefit from moving to that location, and who as such do not yet live
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there. Since restrictions are created at the local level, they are insensitive
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to the interests of these workers, who do not vote in those jurisdictions. Other
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costs of restricting land use—such as reduced economic output—are dispersed
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across society as a whole. Public choice theory explains why governments neglect
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these costs and instead focus on the concentrated benefits to landowners—even
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if, in the aggregate, the costs vastly outweigh the benefits.
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Possible solutions
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Open Philanthropy and 80,000 Hours have proposed a number of solutions to the
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problems caused by land use restrictions, which are quoted below. Policy options
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Promising options open to policymakers include the following:[2]
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"Local governments in high-wage high-regulation metropolitan areas could
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simply 'upzone', permitting more and denser development." "Local governments
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could change the process by which they decide how to regulate land use. For
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example, they could adopt a 'zoning budget' targeting an overall level of
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housing growth, so that restrictions in one area would have to be balanced
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by expansions elsewhere. This would help align incentives of advocates for
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individual projects to support greater overall growth." "Decision-making in
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land use policy could be re-assigned from local to regional or state
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authorities, which would likely be less susceptible to neighborhood pressure
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to oppose new development."
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Funding options
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Promising options open to funders include the following:[5]
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Fund existing local groups, such as YIMBY Action, California YIMBY or Open
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New York, or potential new groups in key housing markets. "Fund a campaign
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to move land use decision-making power from the local to the regional or
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state level. We are not aware of any existing arrangements of this form in
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the United States, or of any active efforts to promote them, so this would
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likely be an exercise in 'active funding.'" "Support the development of a
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policy consensus (for example, by convening conferences or sponsoring work
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on this issue in prominent think tanks). This would have the benefits of
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both encouraging coordination on this issue by policymakers, and improving
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our understanding of what policy changes are most likely to be beneficial."
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* https://www.openphilanthropy.org/focus/housing-policy-reform/
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We seek to reduce the harms caused by excessively restrictive regulations on
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local housing.
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Local laws often prohibit the construction of dense new housing, which has
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contributed to rising housing prices and lower affordability for renters and
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buyers.
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Ratio of median house price and median household income in the US, 1967-2021 (US
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Census Bureau). House price data is MSPUS; median household income is from
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Income in the US Table D-1.
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These price increases are pronounced in large, high-wage metro areas (e.g., New
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York, Boston, San Francisco, Los Angeles, Seattle, and Washington D.C.). More
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permissive policy which enabled a greater supply of housing in those areas could
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unlock value by:
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Encouraging economic growth through greater innovation and agglomeration.
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Increasing the earnings of individuals moving to high-wage jobs in those
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areas. Enabling more people to live in denser areas, which have lower carbon
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emissions. Redistributing wealth and income to lower-income households and
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supporting access to housing for lower earners.
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Changing housing policy laws is unusually valuable because there is a huge
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amount of private capital and firms dedicated to building new homes. Removing
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restrictions on building — especially denser construction in cities — unlocks
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that capital to be deployed much more efficiently without requiring
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philanthropists or government to directly subsidize construction. Indeed, the
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evidence is clear that “upzoning” (removing restrictions on denser housing) can
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lead to increases in supply and reductions in prices, and several recent studies
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conclude that building new homes (even market-rate homes) tends to make housing
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more affordable, including for low-income households.
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Considering these potential gains, we think that working toward more permissive
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housing policy from a public-interest perspective (as opposed to lobbying for
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specific developments) appears neglected in those key regions. We began making
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housing policy grants in 2015 and were early supporters of the YIMBY movement,
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which supports people to advocate for permissive zoning and development in their
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local areas. Since that time, we have seen significant growth in the movement
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and notable policy breakthroughs. Successes our grantees have been involved in
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include: the growth of Accessory Dwelling Unit (ADU) reform in California and
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Seattle, bills supporting middle housing and ADUs in Washington state, and
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further legislative success in California for housing on commercial corridors
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and removing parking mandates near transit.
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